Australian Property

Viewing posts in the Australian Property category

Doc Wilson: House prices flat for a decade

ScreenHunter_04-Apr.-17-20.53-200x200 You've got to love the Fairfax property spruik machine: Australia's property prices will be "flat as a pancake" over the next decade, Domain Group senior economist Dr Andrew Wilson says. The resources boom is over, the international economy "can't get its act together" and investors will soon start to lose interest. "Going forward we are going to have a much flatter housing market in terms of price," Dr Wilson said. Even growth in the stand-out city, Sydney - up 3.8 per cent in the September quarter and 16.6 per cent in the past year - is moderating from the higher levels of last year. ...There...
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The ABC does macroprudential

ScreenHunter_3712 Aug. 12 07.03 By Leith van Onselen ABC's The Businessaired a really good overview (above) of the current state of play in the Australian housing market, particularly the RBA's and APRA's deliberations on how to deal to deal with runaway investor demand, which is at unprecedented levels (see next chart). The segment includes a useful soundbite from RBA governor, Glenn Stevens, who all but acknowledges that tighter regulatory (macroprudential) restrictions on investor mortgage lending is on its way, with deliberations with APRA advancing: "We're keeping a close eye on the build-up of credit to investors...
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Mac Bank warns on property

images Finally a few sell-siders are catching up to monetary reality. From BS, Mac Bank sees: “Clouds looming over the domestic property market. Recent  announcements around macroprudential regulation represent a significant change in view from the RBA. Likewise the Government appears about to get serious about foreign buyers. While this is unlikely to result in a ‘train wreck’,  international experience points to 2 to 13 per cent underperformance by banking sectors faced with these kinds of interventions.  Domestically we believe the sector hasn’t skipped a beat mainly due to...
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RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 23 October 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.13%. It was the fifth consecutive weekly increase (see next chart). Home prices rose across all major capitals except Adelaide (see next chart). Values are up by 1.09% so far in October, with all major capitals except for Adelaide up (see next chart). Since the start of the year, home values nationally have risen by 7.47%, with all major capitals rising in value (see next chart). Over the past 12...
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Will Australia join the great global deflation?

deflationcycle By Leith van Onselen Dixon Advisory's Max Walsh has written a ripper piece in The AFR today warning about the dangers of pinning an economy on rising housing values and debt, which more often than not lead to a significant downturn and a period of financial instability: If you think you have heard the story of the finance-based, housing-led recovery that was the ideal medicine for an economy under stress, you are correct. A property boom underwritten by high leverage and/or low mortgage entry rates will collapse suddenly, ensuring a slow recovery. In Australia our banks have become little...
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Land prices spiral upwards

ScreenHunter_18 Jul. 05 10.22 By Leith van Onselen The Housing Industry Association (HIA) and RP Data have released their latest Residential Land Report, which reveals that median vacant lot price across Australia hit a record $205,330 as at June 2014 after rising by 1.1% over the quarter (see next chart). Capital city lot prices rose by 1.8% in the quarter to be up by 7.4% compared to the June 2013 quarter. By comparison, land prices in Regional Australia were essentially flat in the June 2014 quarter (down 0.1%) to be up by 4.1% over the year. Residential lot sales also rebounded, with the number of sales rising...
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Housing requires both a supply AND demand fix

ScreenHunter_4628 Oct. 23 10.47 By Leith van Onselen The CEOs of the CBA and AMP have urged Australia's government's to invest in new infrastructure projects and undertake other supply-side reforms in order to improve housing affordability. From The AFR: Mr Narev urged governments to take the pressure off house prices by using infrastructure projects to increasing the supply of housing stock. “The appropriate dev­elopment of infrastructure, particularly roads and transport, will open up new opportunities to develop residential ­living and therefore create more supply in the market, which gets the overall property...
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APM: House price growth slowing

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen Australian Property Monitors (APM) (now called Domain Group) has released its September quarter house and unit price results (below), which recorded a 1.2% increase in house prices over the quarter at the national capital city level, and a 0.3% rise in national capital city unit prices. In the year to September 2014, APM recorded an 9.4% increase in national capital city house prices and a 6.8% rise in unit values - a deceleration from the 11.0% (houses) and 8.5% (units) annual growth recorded in the June quarter release. Looking at the capital city breakdown, you can...
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What kind of macroprudential can we expect?

flat,550x550,075,f By David Llewellyn-Smith Macroprudential tightening is coming but what kind? In the course of a year, the Reserve Bank of Australia (RBA) has swung from a viewpoint that macroprudential is "dreaded" and the "latest fad" to an endorsement of doing something about the housing bubble that doesn't involve raising interest rates. Throughout this time there have been two lines of debate of what kind of macroprudential might be used. The first is requiring banks to list interest rate buffers within mortgage calculators: “Other than avoiding an over-easing of monetary policy, the most promising...
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Mirvac’s negative gearing plea is nonsense

ScreenHunter_4625 Oct. 23 07.57 By Leith van Onselen Mirvac Group CEO, Susan Lloyd-Hurwitz, has thrown a wet blanket over calls to reform Australia's negative gearing regime, claiming that any wind back of the rules would pose serious risks to the stock of rental properties available. From The Australian: "...as a society, we would have to think long and hard about the removal of negative gearing because it has very far-reaching implications”... “We need rental stock and it’s currently owned by mum-and-dad investors, negatively geared,’’ Ms Lloyd-Hurwitz said, noting that, unlike the US, Australian institutions and...
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REINSW slams RBA’s jekyll and hyde routine

ScreenHunter_4619 Oct. 22 13.57 By Leith van Onselen President of the Real Estate Institute of New South Wales (REINSW), Malcolm Gunning, has this afternoon slammed the Reserve Bank Of Australia's (RBA) inconsistency on property investment, which has seen it swing from encouraging investment to being on the brink of implementing macroprudential curbs to slow the property market down. From The Australian: "Six months ago, Mr Stevens was encouraging investment in real estate," Mr Gunning said. "Now that the public is buying properties with confidence, the RBA has changed its mind and is being critical, giving warnings about...
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Rents decouple from prices, population growth

ScreenHunter_17 Jul. 16 08.30 By Leith van Onselen The September quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed continued moderate rental growth at the national capital city level. According to the ABS, rents nationally grew by 0.7% over the September quarter of 2014 – up slightly on the 0.6% growth recorded in June – but was only 2.5% in the year to September, with a clear downwards trend evident (see below charts). What's most interesting about the current moderate rental growth is that it is at odds with other housing-related indicators,...
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RBA warns property investors of macroprudential

ScreenHunter_4598 Oct. 22 08.18 By Leith van Onselen RBA deputy governor, Phil Lowe, gave a speech yesterday afternoon to the Commonwealth Bank of Australia's 7th Annual Australasian Fixed Income Conference, whereby he expressed overwhelming frustration that the prolonged period of record low interest rates had not generated genuine productive investment, and had instead been channeled into existing assets, like property, inflating values: Interest rates are as low as they have ever been in most advanced economies... This shadow has created a difficult environment for savers and those managing savings. Perhaps at the risk...
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Dodgy Chinese money already drying up at unis?

0 From Michael Sainsbury via Crikey on the suddenly pressing Chinese anti-corruption campaign: The economic effects of the campaign are very real. Tough new laws on entertaining have hurt the hotel and restaurants industries, as well as the karaoke and hostess bars that have relied on officials spending up. One former Australian diplomat who was recently entertained in China said that toasts, which would traditionally have been made with China’s vicious local firewater baijiu, were being made with, of all things, milk -- as a beverage all but unknown in many parts of China only a few decades...
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Police set to seize dodgy Chinese assets

chinese-corruption From Fairfax: The Australian Federal Police are poised to seize assets of corrupt Chinese officials within weeks, in an unprecedented joint operation with its Chinese counterparts. In an exclusive interview with Fairfax Media, Commander Bruce Hill, the manager of the AFP's operations in Asia, has confirmed Australia has agreed to assist China in the extradition and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars. The joint operation will make their first forfeiture of assets within weeks, having agreed on a...
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Keating backs macroprudential, SMSF curbs

ScreenHunter_4571 Oct. 20 08.11 By Leith van Onselen Former Treasurer, Prime Minister, and architect of Australia's compulsory superannuation system, Paul Keating, over the weekend called for curbs on self-managed superannuation funds (SMSFs) using leverage to invest in Australian residential property. From The AFR: [There has] been “a dramatic acceleration” in investor financing, said Mr Keating... “This is associated with the growth of self-managed super funds and their ability to borrow,” he said. “If I was treasurer today, I would be looking very hard at the whole entitlement or availability of debt to SMSFs....
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Auction clearances steady

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate was essentially steady over the weekend, with small falls in Sydney and Brisbane offset by a small rise in Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 68.5% over the weekend, which was down 0.2% from the 68.7% preliminary clearance rate reported last weekend. Sydney’s clearance rate fell by 0.3% to 75.5%, whereas Melbourne’s rose to 68.0% (last weekend 67.2%). Brisbane, which typically only has a small number of auctions, experienced an 3.7% fall in its clearance rate to 50.5%. Overall auction...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 19 October 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Refinancing: An Important Driver Of Housing Finance

ScreenHunter_4561 Oct. 17 11.38   By Martin North, cross-posted from the Digital Finance Analytics Blog We have been looking in detail at recent trends in housing refinance, by using a combination of the recently released ABS data and results from the DFA surveys. There is an interesting story to tell here. So today we explore the refinancing landscape. First the ABS data shows us that refinancing value has been increasing to a record $5.9bn in July 2014, and represents more than 30% of all owner occupied lending, and about 17% of all housing lending. We also see that the state distribution is centered on NSW and...
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Perth builds into the bust

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen The AFR is reporting today about the boom in Perth residential housing construction, which has led to mammoth demand for tradespeople and other skilled labourers, softening the blow from falling mining investment: Tradespeople are in hot demand in Perth and bricklayers and other skilled labourers struggle to keep up with residential construction demand. The busy period of house and apartment constructions is underpinned by high vacant land sales in Western Australia in 2012-13 at just over 20,000. ...The busy period of vacant land ­purchases has since subsided, with...
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SQM: Rental vacancies fell in September

ScreenHunter_07 Jul. 17 21.09 By Leith van Onselen SQM Research has released its rental vacancy data for the month of September, which registered a seasonal 0.1% fall in the national rental vacancy rate to 2.2%, and a 0.2% increase over the past year (see below table). As shown above, every capital city experienced a fall in vacancy rates over September, except for Darwin, with Darwin and Perth also up by 1.0% over the year. SQM Research’s Asking Rents Index also revealed that Landlord’s sentiment has not been increasing, with the capital city average recording a 0.2% monthly decrease in asking rental prices...
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RP Data weekly Australian house price update

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 16 October 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.42%. It was the fourth consecutive weekly increase (see next chart). Home prices rose across all major capitals (see next chart). Values are up by 0.96% so far in October, with all major capitals except for Adelaide up (see next chart). Since the start of the year, home values nationally have risen by 7.33%, with all major capitals rising in value (see next chart). Over the past 12 months, home...
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Conflicted Xenophon responds

ScreenHunter_4542 Oct. 16 13.52 By Matt Ellis, cross-posted from the Rational Radical blog Last week I had the opportunity to speak to Senator Nick Xenophon about our petition against his plans to allow first home buyers to use superannuation funds for housing deposits. It seems he had at least taken some small notice of the widespread criticism of such a dangerous policy proposal, and has perhaps even been influenced by the 700+ emails he received on behalf of the petitioners! So thank you to those who have signed the petition so far, and if you haven’t yet, please get on board. We may well have made a very small...
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Foreign appetite for Aussie property grows

ScreenHunter_4459 Oct. 13 10.08 By Leith van Onselen NAB has released its Quarterly Australian Residential Property Survey which revealed a big jump in foreign demand for Australian property. According to the survey, overall property market sentiment was unchanged in September at +19 points, with stronger house price expectations offset by weaker rental prospects. Moreover, sentiment in Western Australia plummeted to its lowest level on record (-39 points). According to NAB, foreign demand for Australian property boomed in the September quarter, with both pre-existing and new developments experiencing increases....
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Actual dwelling construction catches up with approvals

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen The ABS has released dwelling construction data for the June quarter, which registered a solid pick-up in overall construction activity despite divergence between dwelling commencements and completions. According to the ABS, the number of dwelling commencements fell by a seasonally-adjusted 6.9% in the June quarter but were up by 9.2% over the year. Detached house commencements fell by 1.1% over the quarter but were up 15.2% over the year, whereas unit commencements fell by 15.0% over the quarter but were up by 0.5% over the year (see next chart). As shown above,...
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